The loonie was up 0.02 of a cent to 98.91 cents US.
The U.S. Commerce Department reported that retail sales for April were up 0.1 per cent on gains in automobile and clothing sales.
Sentiment has been growing that the U.S. economic recovery is gaining traction, but economists had expected a 0.3 per cent decline in retail sales as a result of higher Social Security taxes that kicked in this year.
"It's encouraging to see U.S. consumers showing some resilience, some propensity and willingness to continue to spend despite some of the prevailing headwinds like a slow growing economy, high unemployment (and) increased payroll taxes," said Craig Fehr, a Canadian market strategist with Edward Jones in St. Louis, Mo.
"All these would suggest that the consumer would want to go into hibernation. I think the data we're getting suggests something a little bit different."
Last week, the Canadian dollar neared parity with the U.S. dollar amid heightened investor appetite.
But that period may soon be over, as the loonie shows signs of softening amid slower economic growth in Canada, a pullback in commodity prices and the strengthening outlook for the U.S. greenback.
Meanwhile, commodity prices continued to mostly head down. The June crude contract dipped 87 cents to US$95.17 a barrel and June gold bullion dropped $2.30 to US$1,434.30 an ounce. July copper was up a penny at $3.36 a pound.
Fehr added that commodity prices, particularly gold, have been high valued because investors buy them when equities appear too risky.
But now that most markets are trading at all-time highs and inflation fears have diminished, gold no longer seems as lucrative of an investment.
"We've entered into a bear market for gold, which a year ago, some might think was impossible to do," he said.
"As a result, assets like gold tend to do better when investors are more fearful and have now started to perform more poorly."